T echnology is disrupting different industries across the world, and real estate cannot be far behind. Already, real estate consultants have moved beyond the traditional ways of prospecting, with the Internet opening up the market in unprecedented ways and taking a lot of the footwork out of finding property.
As much as 70% of modern real estate consultancy prospects are today acquired through digitally-obtained leads.
As big data and analytics become more integrated with the property brokerage industry, such consultancies are now ‘cracking the code’ in many innovative ways, including:
l Obtaining and feeding deal and bid information into their company’s central repository at the tap of a few buttons
l Instantly matching customers’ requirements with the available options
l Tracking data on projects’ construction progress and regulatory compliances in real time as and sales figures information
If we look at the larger picture of the various kinds of technology that can be used in the real estate business, various new avenues and means of doing business are going to open up. Let us take, for instance, crowdfunding.
Crowdfunding
Crowdfunding could emerge as a new way for real estate consultancies to add value both to developers and their customers. For instance, one could use the crowdfunding platform to raise small amounts of money online from several donors in order to finance a developer’s project or venture.
Aggrieved buyers wanting to get their ‘stuck’ project completed may also take the consultancy’s help in setting up an escrow account where the crowdfunded money gets deposited.
When the project is completed and a cooperative housing society is formed, it could sell out some of the extra units in the project and share the profits with all such investors.
Such financial technology can and will revolutionise almost all aspects of the real estate business in the future. In particular, they speed up the transaction lifecycle.
The next big thing is is blockchain
Blockchain
Blockchain has all the hallmarks of a real estate revolution in its own right.
The underlying principle of blockchain technology is the distribution of digital information in a secure and efficient manner — information which can be accessed, albeit with some restriction, but not copied.
This technology will usher in greater transparency, efficiency and accuracy in the Indian real estate sector which involves multiple parties, detailed due diligence and numerous transactions.
Given the rise of online portals, buyers have easy access to search real estate properties ‘online’.
However, the subsequent stages of documentation, past records, due diligence, registration and final closure, pose a real challenge. Blockchain technology, the next wave of digitisation, will make this process simpler.
Simply put, after identifying a property, a buyer can access title records, encumbrances, property taxes, etc. from government records. Further, using a passcode/ private security key of the seller, a buyer (or his representative) will be able to access all previous property records such as maintenance payments and ownership.
Once the property is finalised, the buyer can share these records with the bankers and mortgage can be arranged to post a digital due diligence.
Smooth process
In addition, with digital signatures, payments can be transferred to the seller and the property registered in the name of the buyer.
All-in-all, with blockchain technology, a property transaction can be concluded faster, seamlessly and with limited manual intervention – enhancing the overall efficiency of the system. Other major benefits will include:
l Title fraud elimination
l Minimal involvement of intermediaries like lawyers and brokers, thereby lowering transaction costs
l Elimination of government-level corruption
l Boost to tax revenues
l Eliminating the need for storing physical property papers, thus eliminating the potential of loss and theft
l Significant reduction of property disputes
Digitisation of records, implementation of RERA and GST are the building blocks for the real estate sector in order for it to emerge as a transparent and buyer-friendly industry.
In this scenario, the implementation of blockchain technology is important.
It is essentially a dynamic database of records that offer ‘viewing’ rights to all users but ‘editing’ rights are given only to the owner. This will be a big leap forward in the ease of doing business in the real estate sector.
However, given that the world is still experimenting with this technology, it might take a few more years before we see blockchain technology entering and being used to its full potential in the Indian real estate industry. There is no denying though that it is definitely an integral part of the future.
The writer is Chairman, Anarock Property Consultants
